Letter of Interest or Letter of Inquiry (LOI) 101: The Fundamentals
Table of Contents
- What’s an LOI?
- LOI Crash Course: What You’ll Learn
- Letter of Inquiry vs. Letter of Interest vs. Letter of Intent
- What Matters Most in an LOI
- Responding vs. Reaching Out
- How to Write a Grant Winning LOI
- Six-Step Guide to Writing a Winning LOI for Your Charity
What’s an LOI?
In the charity fundraising and grant writing worlds, the letter of inquiry or letter of interest (LOI) is a concise case for your charity’s cause. It’s written to pique a charity funder’s interest in your proposed project, campaign, or initiatives, and includes a request for the grant maker to consider reviewing an application from your charity.
An LOI will often be your organization’s introduction to a new potential charity funder and your single shot at making a great first impression, so you’ve got to make it count!
LOI Crash Course: What You’ll Learn
Consider this article your crash course in the LOI Fundamentals. In this article, you’ll learn everything you need to know about letters of interest, from the different types of LOIs and why they exist, to when you’ll need them and where to send them to maximize your success. Plus, you’ll discover a six-step guide to writing a killer LOI that will surely make an impact on your potential foundation partners.
By the time you’re done, you’ll be crafting an LOI capable of winning some serious coin for your cause.
Letter of Inquiry vs. Letter of Interest vs. Letter of Intent: Are They the Same and Does it Matter?
Letter of Inquiry LOI: According to authors and grant-writing experts Ellen Karsh and Arlen Sue Fox, a letter of inquiry and a letter of intent are not the same. As they explain in The Only Grant Writing Book You’ll Ever Need, a letter of inquiry LOI is like a mini proposal in which your charity briefly summarizes your organizational mission, the need you’re addressing, the program you plan to implement, and the amount you’re requesting from the funder.i
Letter of Intent LOI: A letter of intent LOI is different. It’s requested by government agencies and some foundations to help determine how many grant applications they expect to receive so they can hire the right number of reviewers. Unlike the mini proposal style of the letter of inquiry, a letter of intent states a charity’s intention to submit a grant application and is only a few paragraphs long.
Letter of Interest LOI: The term letter of interest (LOI) is frequently used interchangeably with letter of inquiry, also referring to the mini proposal style letter described above.ii And just to keep things interesting, some charity funders use different terminology altogether, like an Expression of Interest, to describe what we’ve defined as a letter of inquiry or letter of interest.
Since even the abbreviations are confusing, let’s focus on what we do know: a letter of interest or letter of inquiry is what you send to foundations to introduce your organization and request an opportunity to submit a grant proposal. Short and sweet, it’s designed to captivate their interest and leave them either writing a cheque or wanting to learn more about your charity and requesting a complete grant proposal.
Do Definitions Even Matter?
The definitions are good to know and helpful as general guidelines, especially in the absence of clear instructions from charity funders. They will help to guide your writing and ensure you are sending the right type of LOI for the specific case.
What Matters Most in an LOI
When a charity funder provides directions on what to include in your LOI – regardless of what they choose to call it – their guidelines overrule all other advice. And if you’re ever not sure what a funder wants, try phoning or emailing them to clarify anything you’re unsure of before you start writing.
L-O-Why Even Bother?
Taking a step back, it’s important to understand an LOI’s purpose – why bother taking the time to write and send an introductory letter when you could pitch your full fund-worthy project to a charity funder?
The LOI process exists for two reasons:
- First, because LOIs are brief – no more than two-pages – it’s an effective way for funders to screen many applicants quickly and determine which projects are well-aligned with their priorities.
- Second, reviewing LOIs gives grant makers an idea of the level of interest in their granting program and the type of projects out there. This is especially true for charity funders exploring new granting areas.iii
While it may seem like LOIs are just another hoop for charities to jump through to secure grants, in truth, they’re a time-saver for everyone.
Grant applications can be long, detailed, and time-consuming. It’s better to know a foundation isn’t interested in your project before investing time and energy into a full grant application.
Responding vs. Reaching Out: Two Occasions Your Charity Needs an LOI
There are two situations when your charity will write a letter of interest to charity funders. You’ll craft your compelling mini case either to 1) respond to formal calls for LOIs from funders, or 2) reach out proactively to introduce your organization to potential charity funders.
While the second scenario is the most common for the newbie charity fundraiser and the small to medium-sized registered charity, both are part of a well-rounded grant seeking strategy. Let’s examine both, how often you can expect them to come up, and how to maximize your chance of success in each situation.
Responding: Formal Calls for LOIs
Of the over 11,000 grant making foundations in Canada, very few send out formal calls for letters of intent. Those that do are typically large and well-known. And because they’re high-profile, these charity funders receive many LOIs, making their grants highly competitive.
Generally, larger funders have a longer response time and require a more arduous grant application process, which isn’t great for charities with limited resources. On the flip side, these foundations award more generous grants, which can pay off exponentially in the long run.
While most of this article focuses on using LOIs to reach out and introduce your charity to new funders, it’s wise to keep your eyes open for formal calls from charity funders that are well-aligned with your organization. Then, once you’ve got your proactive LOI process nailed down, you can begin to respond to the formal calls.
How to Crush a Formal Call for Letters of Interest
Formal calls for LOIs should include all the information your charity needs to complete the LOI as well as deadlines for each stage of the grant competition. All you need to do is follow the guidelines provided by the funder.
It sounds simple enough – until you’re faced with a list of instructions four times as long as the two-page LOI you’ve been asked to write!
This is where a methodical approach will serve you well, starting with reading the guidelines several times and noting the following:
- Problem(s) the funder is trying to solve with the grant
- Population(s) and location(s) served
- Specifications on what they will or won’t fund
- Grant range/size
- Criteria that align perfectly with your charity (then highlight these areas in your LOI)
- Formatting requirements (font style & size, spacing, headings & subheads, word & character counts, margins, etc.)
- Guidelines that disqualify your charity from eligibility
Once you’re crystal clear about what the funder is looking for and certain your charity is a match, it’s time to begin writing.
As you’re responding to the questions, make sure to:
- Answer all questions asked
- Answer all questions in the order they are asked
- Answer each part of any multi-part questions, also in the order they are asked.iv
And, once you’ve finished writing your brilliant letter of interest, leave time to:
- Proofread, proofread, and proofread again. Some tips to catch errors are having someone else read your document or leaving the letter for several days and returning to it with fresh eyes.
- Submit your LOI a few days before the deadline.
Filling Out an Online LOI
Some funders provide an online LOI template for your charity to complete. Many of these forms allow you to save your application so you can work on your LOI over the course of several days or weeks before submitting the final version.
Keep in mind these forms may have word or character limits for each section of text. For those that don’t allow you to save your work, try copying the questions and text limits into a word document and answering the questions there. Once your document has been thoroughly edited, paste each section into the online form, complete your final review, and submit!
The Waiting Game
A timeline for when decisions will be made should be provided to all applicants with the call for LOIs. If you haven’t received a response a few weeks past the decision date, it’s a good idea to contact the charity funder – that is, unless they’ve specifically asked you not to reach out.
Sometimes grant makers experience delays in their process, or heaven forbid, your acceptance letter got lost in the mail or an email landed in your junk mail folder.
Reaching Out: Introducing Yourself to New Charity Funders
Since most charity funders don’t issue formal calls for letters of interest, you’ll likely spend the bulk of your LOI-writing time focusing on scenario number two – reaching out to potential charity funders to introduce your organization.
In fact, over 35% of Canadian grant making foundations can only be reached by snail mail. For these charity funders, a letter of interest is the only way to establish contact, assuming no one from your organization has an existing relationship with someone on the foundation’s board (more on leveraging relationships in Part 2).
And while this may seem like a roadblock, it’s actually a golden opportunity for the small- to medium-sized charity. Based on our experience at Grant Advance, these foundations are like hidden treasure and your best bet for receiving grant funding.
- Grantmaking foundations that keep a lower profile and only have a mailing address as their contact information are approached by fewer charities than their more well-known counterparts.
- Charity funders receiving fewer phone calls, emails, and letters are more open to considering new partnerships.
- Lesser-known foundations make funding decisions more quickly and require less information to do so; they’ll sometimes award grants based solely on LOIs without requesting full grant applications.v
If that doesn’t make you want to dig deep and get started on writing your charity’s compelling LOI, I don’t know what will!
How to Write a Grant Winning LOI
Thankfully, there are tried-and-true industry guidelines for LOI content and structure, which you’ll learn in the six-step guide to writing a winning LOI for your charity.
First, it’s helpful to understand two essential ingredients at play in all great letters of interest. These elements appear in all successful fundraising solicitation materials, or documents in which a donor is asked for money, too.
The Two Essential Ingredients of a Successful LOI
Think about the goal of an LOI. You’re trying to convince the charity funder to consider reviewing a grant proposal. More than that, you’re trying to inspire them with your vision and cause, to give you funding.
The best way to get this result is to create a letter that presents a clear case for your cause while drawing from personal stories and anecdotes to evoke strong emotions from the person reading your submission.
Head and Heart
Giving is emotionally driven, and in general, the larger the gift, the more emotionally motivated. At the same time, humans love logic. Think left brain and right brain. Reason and emotion. A successful LOI needs to appeal to both.
Craft your LOI like a legal argument, each section building off the last, and draw on the age-old art of storytelling to inject an element of emotion. You’ll make it an easy yes for the foundation directors.
The most successful LOIs are also free from grammatical errors and jargon. They read seamlessly, as though you, the charity representative, are sitting in a room across from the grant-making organization, sharing your heartfelt appeal for funding face to face. The ideal letter will flow from word to word, sentence to sentence, and paragraph to paragraph logically and effortlessly.
Six-Step Guide to Writing a Winning LOI for Your Charity
Congratulations! You’ve learned all the basic information you need to know about LOIs.
All that’s left now is to read the six-step guide to craft your winning letter of interest, and you’ll be ready to write.
Part 1. The Summary Statement
Ever heard the stat that over 50% of bosses make their decision on whether to hire a candidate within the first few minutes of a job interview?vi The opening paragraph of a LOI is like the first few minutes of an interview. It’s your first impression with the charity funder, and first impressions count. So, make sure to wow them with your opener!
The LOI summary is where you’ll briefly introduce your charity, outline the need your charity exists to fill, the reasons why your organization and the foundation would make a great team, and your unique solution to the problem at hand.
You’ll also outline your total project cost, the amount needed from the charity funder, and your request for the foundation to consider reviewing a grant application. In short, it’s a summary of what’s to come in your LOI, all rolled up logically and concisely into one tidy little paragraph.
To summarize, your goal is to create a compelling four to six sentence opener that answers the following questions:
- Who is writing and why? I like to include the charity’s CRA# in parenthesis when introducing the organization name here.
- What is the problem your charity exists to serve and what is your proposed solution (the project)?
- How does your charity and the project align with the charity funder’s mission and purpose? Or, why you think you’d make a great team.
- What is the total project cost and how much do you need from the funder? It’s best practice to include your ask – or, how much you’re requesting from the specific funder receiving the letter – in the first paragraph.
- How will the world be changed for the better if the funder makes the gift? Help the funder understand the difference their gift would make. Inspire and invite them to partner with you.
There’s no need to follow the exact order noted above. Every LOI is different and each one will require a slightly different touch.
A good way to test if you’ve included everything you need in your summary statement is to see if the paragraph makes sense as a stand-alone piece. Try reading it to someone who knows nothing about your charity and ask if they understand. Better yet, ask if it makes them want to give. If they answer yes to both questions, you’ve nailed it!
Part 2. The Need Statementvii
The need statement is where you share the problem your charity seeks to solve. This is where you’ll balance the two essential ingredients of a winning letter of inquiry noted earlier: emotion and fact.
Here, you have the greatest opportunity to help your reader feel intense emotions like sadness, grief, despair, anger, and frustration in response to the need you describe. While it may seem counterintuitive to want to evoke difficult negative emotions from your reader, remember that emotions motivate people to give.
Use techniques like emotional storytelling, personal anecdotes, and pictures – always used with consent – to show the pain and hurt your charity is addressing. If possible, paint a picture of how the issue might impact the reader’s life – their family, friends, city, country, or planet.
Help the reader understand the dire need your target population is facing so they feel compelled to alleviate the suffering and see the hope and inspiration offered by your brilliant solution.
And while emotion is important, facts, data and statistics are also key to establishing context and building your case. Aim for a few well-placed statistics to highlight the plight of the population and emphasize the need for a solution.
When it comes to the right balance of emotion vs. fact, there’s no perfect formula. It depends on your charity, your need, who is reading, and many other factors. Since I don’t have a cookie-cutter answer, I’ll leave you with this: behind the door of every potential foundation funding partner is a person with a heart.
Part 3. Your Charity
This section builds on the need statement by introducing your charity and its people as enthusiastic advocates on a mission to address the problem and establishing why you’re the right ones for the job.
Introducing Your Charity
Start by clearly stating your charity’s mission, vision, and goals, specifically as they relate to solving the problem described in the need statement.
Next, describe your organization’s activities, including the demographics and size of the population(s) served and the geographic region(s) where your organization is active.
If you have space, explain when and how your charity was founded. Share the story of what led to your charity’s creation. Storytelling is a wonderful way to appeal to emotion and helps the funder connect with the human beings with hearts behind the doors of your potential foundation funder.
Once you’ve introduced your organization and its work, it’s time to share your history of success to show the funder you’re capable of seeing projects through from start to finish and delivering programs with results. Think of this section as establishing credibility and laying the groundwork for when you send a full pitch for your proposed project.
Successful Programs or Projects: Share one or two of your charity’s successful programs that’ve led to measurable change in your community. Whenever possible, include statistics to show the projects you’ve implemented have led to sustainable solutions and had measurable results. Storytelling or quotes from members of the population served work well to demonstrate the impact of your work.
Awards, Rankings, or Accolades: You can also establish credibility by mentioning impressive awards, rankings, or accolades your charity has received that are relevant to the proposed project.
If the foundation knows you’ve already achieved great things, they’ll have greater confidence in supporting you. So, if you’ve seen results, share them. You never know what’s going to set you apart from other organizations competing for the same grant funds.
And if you’re a newer charity, don’t stress. You can still inspire confidence by sharing your grand vision for what you plan to achieve…all with a little grant funding, of course.
Part 4. Project Description
By now, you’ve hooked the potential funder with your captivating summary, created an emotional response with your need statement, and established your charity as the right organization to address the problem.
It’s time to present your awe-inspiring solution. This is where you share the nitty-gritty details on what you plan to do and how you plan to do it.
Keep in mind that while an LOI doesn’t need to provide as much detail as a grant proposal, it does need to offer enough information to show the charity funder your project is carefully planned and isn’t just a rough idea floating around in someone’s head.
To give your LOI the best chance of success, make sure the project description answers the following questions:
- How does the project serve your charity’s mission and goals?
- How does the project address the need?
- Who will the project serve? Include demographics and geographic region(s)
- What are the anticipated project outcomes? What will be achieved and how will it be measured?
- What is the timeline? Include your anticipated start and end dates. If the project is meeting an urgent need, mention that here.
- How will the project be sustained financially once grant funding runs out?
Just like the need statement, the project description is a brilliant opportunity to make your reader feel powerful emotions. Except this time, you’ll want them to feel things like hope, joy, gratitude, and excitement…all with the goal of inspiring support for your worthy cause.
Part 5. The Ask
You’ve outlined the problem, your charity’s response, and your clear plan to address the problem. Now, all you need is grant funding to turn your vision into reality.
It’s time to outline your project budget, mention any other funding partners or revenue sources, share the total project cost, and ask the charity funder for a specific amount of money.
To summarize, the ask section should answer the following:
- What is the total budget for the project?
- How will the funds be spent? Provide a high-level overview. A detailed budget is not expected at this stage.
- Are there other funding partners or revenue sources? For example, other donors, fundraising events, government funding, or in-kind contributions of real estate, gifts of time, equipment, supplies, or products. If so, share how much funding you’ve raised already raised and how much you anticipate raising.
- How much money do you need from the funder? Make sure to ask for a specific dollar amount clearly and directly.
Close this section by painting a picture for the charity funder of how the world would be improved if they decided to partner with you and donate to this project.
How would the population your charity serves be forever changed by the charity funder’s gift?
Part 6. The Next Steps
In the final section of your letter, thank the funder for taking the time to read your LOI and for considering your request to submit a grant application. Be sure to include your email address and phone number along with an offer for them to get in touch, should they have any questions or wish to speak with you further about your charity or the project.
Finally, end with one line about what support from their foundation would allow you to accomplish, always relating it back to how their gift will meet the need your charity seeks to address.
Now, give yourself a pat on the back because that was a lot of information, and you plowed right through it.
All that’s left is to pick up your favorite writing instrument and start crafting your grant winning LOI. With these fundamentals of LOI writing under your belt, we hope you have a better understanding of why they are so important for charity fundraising, and have the information you need to write LOIs that will impact foundation funders and inspire them to take action by partnering with your charity. It’s a lot of information to process, we know, but taking our tips to heart will certainly help to improve your fundraising efforts. If you’re looking for more ways to make fundraising, LOI and grant writing easier, Grant Advance is here to support you with our simple funding solution! Contact us today for a complementary research and strategy session and see how we can help your charity secure more funding for its cause!
By Laura Ralph, Fund Development Advisor
Laura is a writing wizard with more than a decade of experience in higher education and medical fundraising.
i Karsh and Fox, 63.
ii Despite the two distinct definitions from experts Karsh and Fox, a quick Google search reveals the phrase letter of interest is used far more commonly than letter of inquiry. Letter of Intent is also used interchangeably with letter of interest to refer to a mini proposal style introductory letter from a charity to a charity funder. This suggests that Karsh’s and Fox’s fixed definitions don’t reach across the entire charitable sector.
ivKarsh and Fox recommend including “subheads that reflect each question” to show the funder you’re responding directly to each of their questions. While there may not be room for this in your LOI, make it crystal clear you’re responding to each question they’ve asked.
vThese observations are based on the reporting of clients of Grant Advance Solutions Inc.
viiUnlike most resources that introduce the charity right after the summary statement, I recommend moving from the summary statement directly to the need statement, followed by the charity introduction. I prefer this order because it creates a stronger argument. The need statement lays the groundwork to present the charity as an answer to the need. On occasion, I will use the conventional order. There’s is no right or wrong answer – only what works best for your charity.